National Lottery Bill - Standing Committee A

[Mr. Roger Gale in the Chair]

National Lottery Bill

New Clause 1 - GUIDANCE TO DISTRIBUTING BODIES

‘After section 27 of the National Lottery etc. Act (1993) (c. 39), insert—
“27AGuidance to distributing bodies
(1)The Secretary of State shall issue guidance to the distributing bodies on the distribution of lottery funds, including reference to—
(a)the means of ensuring that lottery funding is allocated without political interference;
(b)the distinction between essential and desirable government expenditure;
(c)the distinction between core central government expenditure and lottery funding;
(d)the distinction between local government expenditure and lottery funding;
(e)the means of ensuring transparency in the funding of projects which receive both national lottery and government funding in relation to—
(i)accounting practice, and
(ii)public announcements.
(2)Before issuing guidance under subsection (1), the Secretary of State must consult—
(a)the distributing bodies;
(b)bodies (other than public or local authorities) whose activities are not carried on for profit;
(c)the national Lottery Promotions Unit; and
(d)representatives of local government.
(3)Guidance issued under subsection (1) must have regard to the 1998 Compact between the Government and the Voluntary and Community Sector.
(4)Guidance under subsection (1) shall not be issued unless a draft has been laid before and approved by resolution of each House of Parliament.
(5)The distributing bodies shall report from time to time on how the guidance issued under subsection (1) has been taken into account.”.’.—[Mr. Don Foster.]

Brought up, and read the First time.

Question proposed [this day], That the clause be read a Second time.

Question again proposed.

Richard Caborn: Before lunch I was trying to explain to the Committee that the new clause is very reasonable. I shall resist it because it has one or two flaws, and it was badly argued by the Opposition. They did not do the clause any justice at all.
Our approach is very much in line with the thinking out there from the general public as reflected in the consultation. During all the consultations, it was true that people wanted additionality. It was part of the intention in the mid-1990s when the lottery was set up  and broadly speaking, all Administrations have adhered to it. The protection regarding sports, the arts and heritage exists now and will do so in future.
As an aside, several hon. Members argued about Government direction. That has to be considered carefully. Let us consider the amount of money that the constituents of the hon. Member for Bath (Mr. Foster) received from the New Opportunities Fund. I do not know whether he wants us to withdraw it because it is politically incorrect, but we will do if he desires that. The project was for Bath and North East Somerset council to provide school pupils and local partners with secure and accessible flood lighting and hard court surfaces. The facilities have increased participation in a wide range of sports including soccer, hockey, basketball, tennis and netball.

Don Foster: Will the Minister confirm that I heard him absolutely correctly when he said that if I wanted those projects withdrawn, “we will do if he desires that”? Is that not the clearest indication we have ever had of the Government’s willingness to interfere in lottery decisions?

Richard Caborn: If the hon. Gentleman allows me to complete my explanation I was going to say “after consulting NOF”, but I was only half way through the explanation. The hon. Gentleman is a true Liberal Democrat because he wants to shoot from the hip all the time. That is the problem with the Liberal Democrats; they never think things through. I shall continue to show what this politically incorrect Government have done for the hon. Gentleman’s constituents. The facilities have benefited 1,400 students, and through partnership will benefit 3,500 community visitors in the first year. I shall consult NOF and see whether it is achieving its target. If not, the hon. Gentleman can write to me and I will get the funds withdrawn. Obviously, as a Liberal Democrat he wants to be purer than pure.
There is also a long list of the—politically incorrect—investments in East Devon; Littleham primary school parent teachers and friends association, Maytree pre-school, Bassets farm pre-school and so on.

Hugo Swire: How much?

Richard Caborn: The awards to enable pupils to sit in a range of extra-curricular outdoor activity come to £5,000. The cost of pre-school activities and play areas is £5,000. The group providing preschool education costs £1,200. [Interruption.] I shall continue with this politically incorrect list of investments so that everyone can hear it.
In the Isle of Wight, £279,000 has been provided for sports facilities, which will affect 1,500 pupils in the first year and 1,000 community users. If what was said this morning was anything to go by, anyone would think that investments, which were supposed to be politically correct, were made only in Labour constituencies in inner-city areas. I suggest that all hon. Members have gained advantage from the community programmes provided by the New Opportunities Fund.

Hugo Swire: This is confusing because the Minister, typically, is trying to sell these sums as if they were Government largesse when they come from lottery funding, which is exactly the problem. As the Minister has got his civil servants to crawl over all these grants—rather limited grants in the case of East Devon—would he share with the Committee how many of a similar nature his own constituency received?

Richard Caborn: I do not have that information. I shall write to the hon. Gentleman and put it on the public record.

John Mann: Not enough.

Richard Caborn: My hon. Friend says it is not enough.

Andrew Turner: Since the Minister is being so generous, perhaps he could write to me with details of what largesse my constituency has received from the lottery fund. I would be truly grateful for that information.

Richard Caborn: The information will be winging its way to the hon. Gentleman over the next couple of days and I think that he will be quite shocked at the results. May I now get down to the serious matter of discussing the new clause?

Andrew Turner: Since the Minister has mentioned my constituency, will he make it clear—as far as I can tell, it was not clear even to those who arrived on time; I apologise for arriving a moment or two late—exactly what point he was trying to make? It did not seem to counter any of the points made by the Opposition during the debate.

Richard Caborn: That does not surprise me at all. Anything that I have said during the Committee will not have countered anything that the hon. Gentleman has said. This morning’s discussion on additionality highlighted the idea that there seems to be a draconian attitude and that investment—through the New Opportunities Fund—had a political direction and seemingly never went anywhere else apart from Labour constituencies. The debate could be interpreted like that. I am entitled to put that interpretation on it. I just thought that it would be interesting for the Committee to know the spread of the benefits that many constituencies, including those of the hon. Members on the Committee, have received for their constituents. I hope that they are grateful to NOF for that type of direction.

Don Foster: I know that the recipients of many of the projects in my constituency to which the Minister referred are indeed grateful. However, since he earlier accused us of concerns about pedantry, will he explain, in pedantic language if necessary, what in anything that I or the hon. Member for East Devon (Mr. Swire) said led him to infer—to imply, to imagine, to think—that we had somehow referred to the issue of Labour constituencies?

Roger Gale: Order. The hon. Gentleman invites the Minister to rehearse discussions that have already taken place. He may wish to do that; I do not.

Richard Caborn: As always, I shall comply with your sound and perceptive directions, Mr. Gale. As we know, this is what we have had to deal with throughout the Committee. I will now revert to the discussion of new clause 1.
New clause 1 seeks to insert a requirement for the Government to provide legislative guidance to distributors on the extent of their independence from the Government, what constitutes additional funding and how that should be reported. It seeks to ensure that the guidance should be drafted only after further consultation with a number of bodies, including as provided for in the 1998 compact between the Government and the voluntary and community sector. The new clause seeks to ensure that the guidance should be subject to approval by a resolution of both Houses of Parliament.
I think that I understand what is behind the new clause. Lottery money is special and should add to, not substitute for, Government expenditure. That bears out what we know from wide consultation: people see lottery money as public money and as different from money raised through taxation. They see it as money that should be spent on different things—things that taxes cannot fund. That makes it even more important that lottery funds be used effectively, reflect public priorities and enhance spending in key areas, whether the source is the private or public sector.
There was an implication that quite a lot of the investment in sport had gone through local education authorities or local authorities. I do not think that there is anything wrong with that. It does not mean that the investment cannot be additional. Many local authorities are incredibly creative, not only in providing facilities themselves but in getting into key partnerships with the private sector. I want to encourage that. That was borne out by the results of the consultation.

Adam Afriyie: During our proceedings, the Minister has been careful to give specific and detailed definitions of the new powers taken on by the Secretary of State. I do not understand why he refuses to define the principle of additionality in the Bill or to accept new clause 1. It would simply clarify a matter about which there is uncertainty and put it to rest.

Richard Caborn: To be honest, that would not be true. Instead, we would have a bank of lawyers discussing the matter. I agree that, wherever possible, we can be helpful in ensuring that the reality and the public perception is that additionality is working. I hope that what I will say later will help with that. However, what the hon. Gentleman described would be the wrong way of doing things because we would finish up in the courts and the interpretation would be a lawyers’ paradise. That is always the difficulty. It was the difficulty with previous Administrations, as it has been with this one. The question is how we can get the best out of lottery funds; ultimately, a judgment is required.  We believe that that judgment has been consistent through all Administrations, but I shall come to that in a moment.
We as a Government are strongly committed to ensuring that lottery grants are additional, so new clause 1 is not necessary. The Government are responsible for establishing a framework for the national lottery. Such a framework has already been achieved through legislation and policy directions that stipulate that lottery distributors should operate at arm’s length from the Government, empower distributors to establish programmes and make decisions on individual applications without Government interference or intervention, and require distributors to ensure that they target awards at the areas and the people who are most in need of them. Distributors are well aware that lottery money should not substitute for money that should be raised through taxation.
By seeking to define “essential” and “desirable” Government expenditure—I assume on the basis that only the latter would be eligible for lottery funding—new clause 1 risks burying lottery distributors and their lawyers in a mire of bureaucracy.

Charles Walker: My hon. Friend the Member for East Devon (Mr. Swire) mentioned cancer services funded by the New Opportunities Fund. Is the Minister suggesting that if the fund had not come up with £90 million—I believe that was the figure my hon. Friend gave—that community would not have received services to prevent and treat cancer? Surely, cancer treatment is a core responsibility of the national health service and should not be funded from any form of lottery money whatsoever.

Richard Caborn: That is true. I do not know the specific circumstances of that case, but there is no reason why additional money cannot be provided for a service. There may well be a requirement to deliver, and that can be delivered, but there may also be additional funds. Take the example of sports facilities. There are general sports facilities, but value can be added through additional spending, whether from the lottery or the private sector. Sainsbury has done a fantastic job in helping with school playgrounds. Fine, the playgrounds were already there, but the additional use of them as a result of the additional investment put into them is very welcome. That is not to say that without that investment the kids could not play and kick a ball around. They could, but they can do it in a better environment than they had previously. That is additional. I do not know the exact circumstances of the case to which the hon. referred—I can look into it—but that is the argument about additional.

Hugo Swire: The Minister, either advertently or inadvertently, stumbled across his definition of “additionality”, and it is very different from ours. Apparently, additionality means using lottery money to top up Government spend. We would argue that that invites blurring of the lines. We define additionality as spend that is completely different from  the Government spend. It should not replace core Government expenditure. A clear difference is opening up, and the Minister has summed it up well.

Richard Caborn: And the hon. Gentleman has summed up why we are not prepared to start defining additionality. He and I can disagree about it, but what will happen in the law courts? As I said, a definition would create a lawyer’s paradise. All sorts of actions will be taken about all sorts of distributors and we will get nowhere at all. That is why we have taken the common-sense approach in the Bill. I accept that we must give Parliament a base on which to have an informed debate, and I shall come to that, but the past few minutes have showed exactly why we are not prepared to put in the Bill or any other place a definition that would allow lawyers to start taking everybody to court.

Adam Afriyie: There seems to be doubt. Proposed new subsection (1) would provide guidance on
“(b) the distinction between essential and desirable government expenditure;
(c) the distinction between core central government expenditure and lottery funding;
(d) the distinction between local government expenditure and lottery funding”.
If £1 was given by the Government for a core Government expenditure such a new NHS hospital and £999 was given by a lottery fund, would that be an acceptable breakdown?

Richard Caborn: I am not prepared to go down that road for the reasons that I gave. I can just imagine the hon. Gentleman and I arguing the matter in court. If there was a definition, the result would be one constituent versus one lottery fund in a lawyers’ paradise. The discussion this afternoon shows the reasons why we do not want to define the term in any way.
Let me proceed, because what I say should be genuinely helpful to the Committee and the House and will make sure that debates about additionality can be taken in the round, and not focus on the specific. If we get down to specific cases, such as cancer services or a school playground, there is a danger of litigation. We politicians are setting out a broad framework, which it is for distributors, not politicians, to operate. The distributors are arm’s length bodies whose members are appointed because of their knowledge, skills and wisdom to distribute funds in the way that our consultation on the lottery demands.
A definition would result in bureaucracy, which would require distributors to fund only projects that fell within a strict and necessarily narrow definition and would negate the many improvements that have allowed distributors to offer excellent joint schemes such as awards for all, which offers simplified applications and quicker decision-making processes designed to encourage those who are most in need to apply and to benefit. I firmly believe that distributors must have the flexibility to support innovative projects and the opportunity to get involved in something to which they can really add value. Trying to anticipate  what sort of projects might be supported necessarily results in the imposition of restrictions limiting the extent to which they can add value.
The new clause proposes that the Government be required to consult specific bodies, including not-for-profit organisations—a very general term. It also requires the Government to have regard to the 1998 compact on relations between the Government and the voluntary and community sector in England. By so doing, the new clause proposes legislation in an area in which we believe it is simply not necessary. Distributors and the Government already consult widely—even more widely than is anticipated under proposed new subsection (2) of the new clause, which I see does not include members of the public. As I have said previously, our aim is to adhere fully to the 1998 compact. That is why I recently met representatives from the voluntary and community sector to explain how the new arrangements will work and, in particular, how we will preserve additionality.
My officials and representatives of the lottery distributors already meet and consult widely with the voluntary and community sector. That is not a sham; it is real consultation. Recently, as well as holding one-to-one consultations we have tried to make sure that the consultation is as wide and as informed as possible. We are indebted to a number of voluntary and community sector representatives for assisting the Big Lottery Fund-led project team by commenting on and testing an improved website and helpline facilities for potential lottery grant applicants. We are trying to ensure that there is a one-stop shop and that the process is much more user-friendly. Their input will help to ensure that the new facilities, which are to be launched early next year, meet the needs of those whom they are intended to benefit.
The new clause would also require distributors to report from time to time on how they are taking such matters into account. We are already working with distributors to ensure that failed applicants get the feedback they want on their applications and that the criteria for successful grant applications are made clear when programmes are launched.
At the meeting between the voluntary and community sector and myself to which I referred earlier, the chief executive of the Big Lottery Fund, Stephen Dunmore, agreed to produce an annual report showing how the additionality principle had been observed. We had an extensive discussion around the table in my office. Concerns were expressed then, and have been again in our debate today. Stephen Dunmore said that he would produce an annual report, which I have agreed will go before both Houses of Parliament and which will be a well-founded source of information that can be used by individuals, by Select Committees and by hon. Members for scrutiny.
Having the matter quantified in the broad annual report is a step in the right direction. One swallow does not make a summer; we have to be careful not to predicate the whole of a policy on one isolated case. We are trying to produce an annual report that, in the round, shows how funds have been used for good causes and how they are additional to other  expenditure. Stephen Dunmore is keen to ensure that that happens and it is important to the lottery’s integrity.

Hugo Swire: I do not follow the logic of placing an annual report on additionality in the Library of the House of Commons when the Minister and the Opposition cannot decide what they mean by additionality. We are fundamentally in disagreement, so what on earth is the purpose of that report? What will it report on? We do not know how the Minister is going to define additionality.

Richard Caborn: Let me spell it out in words of one syllable: we are going to produce a report of which additionality will be a part. We are always in danger of focusing on one area of this issue without looking at it in the round.

Hugo Swire: We are debating additionality under the new clause.

Richard Caborn: I know what we are debating under new clause 1. I am just trying to inform the Committee of how we came to our position. I had a discussion in my office with the voluntary sector and the chief executive of the Big Lottery Fund. He was trying to be helpful by saying that in his annual report he will try to make sure that, from his point of view, the principles of additionality are quantified.
It is not good not to have additionality. The chief executive and the board are the custodians of the money and how it is distributed, and the board is responsible to Parliament through the chief executive, who is the accounting officer. In his report, he will try to quantify and describe how the board believes it has delivered what we in Parliament have asked of it.

Adam Afriyie: Will the Minister explain how anybody can report on something that is undefined?

Richard Caborn: Somebody has to define the concept for the purpose of day-to-day operations, but if the concept were tied down to a definition that would be challengeable in law, those funds might be put into all types of litigation. [Interruption.] Let me explain this very serious point. We believe that if we took certain courses of action, we would create a lawyers’ paradise. As previous Administrations have done, we believe that the best way forward is to put the fund at arm’s length from Government, which we have done, and to make it accountable back to Parliament, which it is. The broad direction given to the independent people working at arm’s length from Government is to receive applications and apply the principles that Parliament has asked them to apply. They report back to the Government in an annual report. The accounting officers are also responsible to Parliament through the Public Accounts Committee.
There are a number of checks and balances. How those people apply the principle of additionality or deliver on the rest of their remit’s broad themes—in the case of the Big Lottery Fund, those are health, education and the environment—is always open to scrutiny by Parliament. That scrutiny should continue to be carried out by Parliament rather than the courts  of law, where we believe the whole thing would get bogged down and could be very expensive and time-consuming.

Hugo Swire: There is a simple way around the problem that would avoid lawyers and everything else. The Minister should echo the words of his own Prime Minister about additionality. The Prime Minister summed it up clearly. All the Minister and the Secretary of State need do is tell all those involved in the national lottery—whatever distributor it is—that they must adhere to what the Prime Minister said. There would then be no recourse to law, because there would be no question of additionality being breached as far as we were concerned.

Richard Caborn: I hear what the hon. Gentleman says—he has laboured the point very hard. All I am saying is that we have accepted the principle of additionality and will continue to do so. We do not want to go down the cul-de-sac which could well lead us—or if not us, the funds themselves—into all types of legal actions. We are putting on the statute book provision for broad directions to distributors agreed by Parliament. The distributors are accountable to Parliament in a number of ways and we are trying to ensure that the information coming back is fuller and sounder. That is why Stephen Dunmore helpfully offered to quantify where the Big Lottery Fund distributors believed their monies would be additional.

Adam Afriyie: I am not entirely clear. Does the Minister agree with his Prime Minister’s words on the definition of additionality?

Richard Caborn: Yes.
The matter is one for distributors and their approach illustrates the extent to which they are willing to take comments on board and deal with them in a pragmatic manner. We do not need to legislate to acknowledge the contribution that the voluntary community sector makes to the social, cultural, economic and political life of the nation—a contribution which we value and indeed support.

Charles Walker: We in Hertfordshire have a number of charities that perform an extremely useful role for many underprivileged people and people who suffer from addictions. At the moment, they get grants from local authorities. They are concerned that local authorities will start to remove those funds if they see the charities getting more lottery money—particularly as local authorities are under some financial pressure. The authorities might well say, “They’ve just got ten grand from the national lottery, which relieves us of that responsibility”. Will the Minister use his platform in this Committee to send a message to local authorities that that will not be tolerated?

Richard Caborn: I put it clearly on the record that it would be totally unacceptable. We have seen the potential for that to happen, but a displacement of that  nature is not what the lottery is for. That is not the intention and local authorities should not act in that way. I can put it no more strongly than that.

Andrew Turner: The Minister’s last statement was at least a partial definition of additionality as far as his Department is concerned, but earlier he referred to the guidance and draft directions that tell the Big Lottery Fund about the principle of additionality. Perhaps the Minister cannot remember exactly what he said, but I got the impression that he was saying the Big Lottery Fund was being asked to have regard to the principles of additionality.
Mr. Swireindicated assent.

Andrew Turner: My hon. Friend nods his head. If the Big Lottery Fund is being asked to have regard to those principles, then additionality must mean something in the Minister’s mind. To what is the Big Lottery Fund being asked to have regard and is it in the direction?

Richard Caborn: It means additional to public expenditure. I will not be drawn for the simple reason that I do not want to have a definition in the Bill or a provision such as new clause 1. Rightly or wrongly, we believe as previous Administrations have believed. We do not want to create a minefield for the distributors that would lead into unhelpful litigation actions.
What we believe is necessary is that we reassure the public out there. They ask for additionality. We broadly agree with that. The Prime Minister’s statement is accepted by the public and every survey done says that, yes, they want additionality. In the last survey, which was on the Big Lottery Fund, their concerns were down at 6 per cent. I know of no other major survey that has shown a concern that additionality is not being observed by the distributors.
I am fairly content. No Administration has been tied down into defining additionality and on the other side of the balance sheet is the fact that the general public believe that Administrations of both political persuasions have tried broadly to adhere to the question of additionality.
I am going one step further. To ensure that the House can have a sound and informed debate on the subject, which it probably could not do before, the annual report of the chief executive of the Big Lottery Fund, Stephen Dunmore, will attempt to show when additionality has been used. That is a move in the right direction, as it will lead to an informed debate, by Select Committees and the like, and it will give the reassurance that I think is necessary.

Hugo Swire: I am partially reassured. By signing up to the Prime Minister’s statement, the Minister has gone some way to reassuring us, because the Prime Minister was specific about additionality meaning in addition to Government spend. However, the Minister’s refusal to include such a provision in the Bill leads me to ask whether his echoing of that statement is a wish, a commitment, an undertaking, a pledge or a ministerial aspiration.

Richard Caborn: All of them; and, as a lawyer would say, I will hold to that interpretation as well. I will not be drawn down that road, as I said earlier, so the hon. Gentleman can make whatever interpretation of it he likes. I assure him that it ain’t going on the face of the Bill. That will ensure that the lawyers cannot drag it through the courts, should they want to. However, we will try to assist the House by ensuring that hon. Members can have an informed debate on the annual report; and the chief executive will attempt to explain to Parliament how he and the board have complied with the directions given.

Andrew Turner: Will the Minister give way?

Richard Caborn: I will not give way again on that point.
I am recorded as saying on Second Reading—it has been prayed in aid many times—that it is important that additionality be embodied in future legislation. What I meant, of course, was that consultation showed that the public regard the principle as important and that we should continue to follow that policy when preparing future legislation. That is not the same as including a requirement in the Bill for secondary legislation. I cannot expect legally to be able to differentiate lottery and taxpayer funding. Even if I tried, it would not, for example, stop a local authority seeking to withdraw or reduce its funding once a lottery grant had been made—the point made by the hon. Member for Broxbourne (Mr. Walker). It is for the Treasury to police additionality. If my Department were ever to seek to replace its funding with lottery funding, the Treasury would rightly reduce its funding by the same amount.
I have tried to explain why we are doing what we are doing. People might not agree, but we have at least tried to explain what we want to achieve. We believe that it will be in the best interests of those who distribute lottery funds, and it will also allow Parliament to debate the matter in an informed way. When all is said and done, the general public seem to be content with the principle of additionality and its operation. For those reasons, I ask the hon. Member for Bath to withdraw the new clause.

Don Foster: I find myself in some difficulty. The Minister said that in consultation the public say that they want additionality; then he told us that the principle had been broadly adhered to by past and present Administrations. I do not know how the Minister can come to that conclusion if we do not have some understanding of what we are talking about.
I accept that including a precise and tightly worded definition in the Bill could lead to problems—the Minister spoke of a lawyers’ paradise. I made it clear that the new clause would not place a definition of additionality in the Bill, because doing so would cause a variety of difficulties. The Minister told us that he assiduously studies the amendments that he wishes to resist, so he will know that the word additionality does not appear in the new clause. However, he has spent a lot of time talking about additionality and the problems that would arise if a precise definition were given. I suspect many members of the Committee  would be sympathetic to his views. My difficulty is that the Minister has not given any reasons why the new clause should be resisted.
I am very confused by the right hon. Gentleman’s response. When I was referring to the National Audit Office’s report I could hear the Minister berating me. When I quoted a section that talked about the issues of accounting practice and who would make announcements, he demanded from a sedentary position, “What’s this got to with additionality?” As the record will show he later said, “But this is about accounting practice.” Yes it was, because that is what the new clause was about. New clause 1 talks about the need for guidance from the Secretary of State including reference to
“the means of insuring transparency in the funding of projects which receive both national lottery and government funding in relation to accounting practice, and public announcements.”
I made the point that the NAO is deeply concerned that the Government do not have it right and so there is a need for guidance on this matter. The Minister has not told me why it would be a bad idea for the Secretary of State, after consultation, to give guidance on those matters.

Richard Caborn: The hon. Gentleman answers his own question. The report he referred to was the Department for Culture, Media and Sport annual report. It stated that we had responded to the NAO report and that the difference between public and lottery funding was somewhat clearer than before. Therefore we did respond to the NAO report.

Don Foster: With respect, the Minister is confusing two different reports. The DCMS report said that the Minister expressed the view that Administrations past and present have broadly adhered to the principle of additionality. That is not the view of the DCMS Committee, which said:
“We believe that the additionality principle is being eroded”.
But I was not referring to that. I was referring to the NAO report which said that there was a need to ensure clear separation between the two, to ensure that the Government were not announcing initiatives that were lottery distributor initiatives and that the accounting stream should be cleared. I gave an example, not from two years, one year or six months ago, but from the current DCMS website, which shows a continuing confusion between the two.
I am in great difficulty because I have heard a diatribe from the Minister opposing an amendment that has not been tabled. There is no amendment seeking to define additionality. I do not know what the Minister’s diatribe was about, although I have some sympathy with what he was saying. I also have some sympathy with those who have been arguing that we cannot possibly have a report on whether additionality has been adhered to unless we have at least some degree of understanding of what we are talking about. That is why it is suggested that guidelines be issued in relation to the various matters that are referred to in the new clause and have been touched on by other hon. Members.

Andrew Turner: The hon. Gentleman will have heard the Minister’s response to my most recent intervention. He said that additionality refers to expenditure in addition to public expenditure. I hope that I have got those words right. I tried to intervene again, but the Minister did not take my intervention. It seems to me that those words are self-defining. We all know that money spent that is not public expenditure is additional to public expenditure, but that does not explain what the Prime Minister, or the Minister in agreeing with him, meant by additionality in the terms that we have been debating it, which is whether expenditure should or would be covered by public expenditure.

Don Foster: I hear the hon. Gentleman’s comment, but attempting to agree or disagree with him, even agreeing or disagreeing with the Prime Minister, is dangerous when debating new clause 1. It is clear that there is some confusion—people’s views and understanding differ. The new clause proposes wide consultation with a range of bodies to see whether we can come to some broad understanding under the themes and headings provided. It does not give a precise legalistic definition, but it provides an approach to test additionality.
I do not want to answer the hon. Gentleman’s question and give my own definition. What worries me is that the Minister does not want to give a definition, yet prays in aid the view of Mr. Stephen Dunmore, whom I hold in high regard. The Minister tells us that Mr. Dunmore will present a report that quantifies and describes how additionality has been delivered, and that presumably defines additionality. Mr. Dunmore is apparently capable of doing that, so it seems odd that we cannot work on a definition collectively, taking in the views of Mr. Dunmore, the Prime Minister, previous Prime Ministers, the Minister and anyone else who wants to have a go, so that we reach a common understanding.

Richard Caborn: Will the hon. Gentleman give way?

Don Foster: I shall give way to the Minister, who has at long last read the new clause and will now tell me what it says.

Richard Caborn: I have read the new clause. I rise merely to ask the hon. Gentleman to clarify and to interpret it, because although it does not mention the word “additionality”, it tries to define it. The new clause provides that the Secretary of State—not Stephen Dunmore—should
“issue guidance to the distributing bodies on the distribution of lottery funds, including reference to ... the distinction between essential and desirable government expenditure ... the distinction between core central government expenditure and lottery funding ... the distinction between local government expenditure and lottery funding”.
I have no disagreement with the hon. Gentleman. That is an interpretation. It asks the Secretary of State to give guidance to the distributing bodies on the definition of additionality. However, that is a million miles away from the chief executive of the Big Lottery Fund saying that he accepts in good faith what Parliament has asked us to do on additionality.
The hon. Gentleman knows that we are putting legislation on to the statute book. We are not writing an annual report, important though that may be to informing the debate. I am not against trying to define additionality. Subsection (1)(b)(c) and (d) of the new clause tries to do that honourably, but I am not prepared to go down that road because I do not think that it is in the interests of the distributors or the lottery in the long term.

Don Foster: In all fairness to the Minister, I think that he lost most of us with that argument. The new clause does not say that there has to be a definition. It refers to areas in which a discussion should take place.
The Minister should think through some of the things that he has been saying during the passage of the Bill. When it suits his purpose he tells us that we should not have definitions; at other times he says that we must have precise definitions of words that some of us do not think need to be defined. To use an example picked at random schedule 1 deals with licensing procedures. We had a debate the other day about whether a licence should be issued to a person who is “suitable. The words used in the schedule are that the commission must be
“satisfied that the applicant is a suitable person to promote the lottery or lotteries”.
We have only to read down a few lines to see that it is crucial to define the word suitable; we cannot run the risk of a lawyer’s nightmare there, so we have to have a definition. “Suitable” is clearly defined in terms of the integrity, competence and financial circumstances of the applicant. In one set of circumstances the Minister thinks that it is important to have a definition to avoid the lawyers’ paradise, but in other circumstances we should avoid having a definition because having one will create a lawyer’s paradise. The argument does not work both ways.
My problem is simple: I have not had a response from the Minister to new clause 1. I have had a response to an amendment that he thought was tabled, but it is not the amendment that I proposed. It strikes me that rather than delay the Committee now, because this is clearly an issue to which the House will want to return, we would do well to accept that so far the Minister has not marshalled his arguments well. He accused me of not presenting the case for the new clause particularly effectively, so perhaps both of us should go back to the drawing board and find another way of approaching the issue. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 2 - DISTRIBUTING BODIES: CRITERIA FOR DISTRIBUTION

‘After section 25(1A) of the National Lottery etc. Act 1993 (application of money by distributing bodies), insert—
“(1B)In determining how to distribute money in accordance with subsection (1) a body shall have regard to maintaining the reputation of the National Lottery and the distributing bodies.”.’.—[Mr. Swire.]

Brought up, and read the First time.

Hugo Swire: I beg to move, That the clause be read a Second time.
The new clause seeks to address the national lottery distributors having some recourse to a reputational impact clause to protect them from making awards that could negatively impact on that distributor as a whole. We have seen that happen in the past. I do not want to rehearse this late on in the Bill all the stories about the fattening of Peruvian guinea pigs and some of the other stories that have come out of national lottery grants over the past seven or eight years, but each and every one in some way undermined the national lottery.
That might not have been evidenced in sales of lottery tickets, but the net result is that Camelot, for instance, was meant to have delivered far more money for good causes than it has. When it won the last licence bid in 2000 it was meant to raise up to £15 billion for good causes; five years into the seven-year licence it has delivered only £7 billion. By the end of its contract in 2008 it is still expected to fall almost £5 billion short. So there was not much expectation management. One therefore has to look at anything that will threaten the health of Camelot; of the game; and of the distributors, which in turn would so affect, potentially adversely, all those good causes that desperately need the money.
I happen to note that a chairman of one distributor whom I spoke to in the past said that they rarely needed a reputational impact clause. In the previous debate on new clause 1 the Minister spent a lot of time talking about a lawyers’ paradise. He also talked about common sense. It is my submission that the new clause is common sense in that it gives the distributors that power.
In terms of it being a lawyers’ paradise, what was happening before, particularly with the New Opportunities Fund, is that some of the awards were being made and the chairman of the distribution body was wholly unable to resist allowing the grants to be made, even if he had thought that they were in some way inappropriate because there was no reputational impact clause.
I remember being told that the problem was that the strange causes that attracted money—the same causes that got into the newspapers—were surrounded by teams of lawyers waiting to challenge the distributor for being prejudiced against the cause for which they were seeking funds. That went on to such an extent that it was almost incumbent on the distributor, and easier, to give in and make those awards rather than face the barrage of lawyers and others with a vested  interest in that politically correct atmosphere. Inappropriate grants were made as a result, as I am sure the Minister would agree.
As we are faced with a new Bill, it is time to introduce something to give more power to stop that happening in the future, a view that is shared on both sides of the House. The hon. Member for Glasgow, South (Mr. Harris) was very keen that the Government should exercise powers of prescription over the Big Lottery Fund to avoid grants that damage the lottery as a whole, and he is absolutely right. If the Government are going to prescribe, why not also prescribe some protection so that the lottery as a whole cannot be damaged by a repeat of those inappropriate grants?
We all want the lottery to prosper; it is probably the only thing that unites the Committee. The Opposition and the Government have not really agreed on anything; the Minister conceded on one amendment, which I withdrew as a result, so we end the Committee stage unable to reach agreement on almost every clause of the Bill and on the simple definition of the principle of additionality, even though the Prime Minister himself defined it clearly. Incidentally, we now hear that the Minister concurs with the definition. It is always nice when a Minister agrees with his own Prime Minister.
It is perfectly clear that we are unable to reach a common agreement on the principles of additionality, so I repeat the words of a letter dated 1 November—it is hot off the press—from Sir John Major to Denis Vaughan, who was very involved in the early days of the lottery, which states:
 “It is scandalous how the Government have so emasculated the original purpose of the Lottery and I do take every suitable opportunity to raise this matter publicly. I shall continue to do so until the resources that were intended for the original good causes are returned to them. I am delighted to see that you have the same ambition.”
If someone like that is uneasy, it could have an effect on the lottery because people will be worried that it is being misappropriated and becoming another Government spending Department, without the strictures that apply to other Departments. If 50 per cent. of lottery funds are distributed by a single distributor under tremendous prescriptive powers from the Government, I wonder how long it will be before there is just a single lottery distributor under the Government’s prescriptive powers. Then there will effectively be another Government spending Department.
I submit that all of that is relevant because it creates a sense of unease about the national lottery at a time when we need it to exceed expectations, not to under-perform, as Camelot has, in distributing funds as it was intended to do. There is to be a new Olympic lottery game and it is critical that there should be a funding stream or there will be a large shortfall at the end of the Olympics which none of us wants.
The Committee is in agreement that we want the national lottery to prosper, even those who were doubting Thomases when the Conservatives had the original idea of a national lottery have come to realise that it has not impoverished the least well off; indeed  it has nourished aesthetically, artistically and, on occasion, even spiritually, which Government were not in a position to do, or had no desire or capability to do. We accept that the national lottery is a good thing, so, we must look at ways of nourishing it, and making it grow in the way we want it to grow, so that more money can go to the causes that we want it to go to, always bearing in mind that it must not grow at the expense of charities that, as we have heard, are better recipients of direct funding than even the national lottery can give.
If we accept all the arguments that we want to do everything that we can to ensure that the national lottery is a success, let us put to one side our disagreements about the creation of the big lottery fund, the prescriptive powers of the Secretary of State, and the breach of additionality, as we see it. Let us put all that to one side, and look at the clause, which is very simple and non-partisan and shows common sense. It would give the powers to where they are needed, so that proper grants can be made in good faith, and we will see a cessation of attacks on the lottery as a whole in the national press.

Jo Swinson: The hon. Gentleman has said that there is a degree of agreement on the Committee. Certainly, everybody would agree that the reputation of the national lottery must be preserved. It is important to the continued success of the national lottery, in particular, if people are to keep playing and maximise funding for good causes. In many ways, after reading the amendment, it is difficult to see how one might disagree with the statement that
“a body should have regard to maintaining the reputation of the National Lottery and the distributing bodies.”
Equally, however, I feel some unease with that, partly, for example, because it is not clear why it needs to be enshrined in legislation. Members of the bodies that are appointed must be fit and able to discharge their offices, so one would expect that, in acting professionally, they would in any case have regard to the reputation of the lottery and the body on which they serve.

Hugo Swire: I have no doubt that those who have to distribute funds are good people of character. However, the problem is that they have no defence mechanism that will allow them to stop making awards. That is the point. The clause is not in any sense to do with the quality of the people making the distributions, but about giving them the protection. That is what the clause seeks to do.

Jo Swinson: Indeed. I was intrigued when the hon. Gentleman explained the rationale behind his thinking on the matter. However, I wonder whether the new clause is the best approach to solving the problem. After all, as has already been expressed in Committee, we know that the lottery’s reputation does not necessarily reflect the reality of the lottery funding that is allocated. There are already gross public misconceptions about where lottery money goes. The ICM poll, commissioned last year by the National  Council for Voluntary Organisations, says that the public believe that the same amount of lottery money is going, for example, to help asylum seekers as to support disabled people. In fact, the amount going to disabled people is actually ten times as much as that going to asylum seekers.
There are misconceptions out there, which, in many cases, harm the reputation of the lottery. Several high-profile cases—the guinea pigs have now been mentioned for the fourth time in this debate—may have had an impact on the reputation of the lottery. However, I am not yet convinced that the solution is clause 2. Surely the problem is public understanding of what the lottery does, which is why it is welcome that there are now in place lots of programmes to raise public awareness of the good work that it does.
The Committee had an earlier debate in which we stated the importance of ensuring that the distinction between raising awareness of the good work that the lottery does and encouraging people to play the lottery is clear. We must ensure that the bodies, whose good work we support, are publicised, and schemes such as the blue plaque scheme all help that.

Tom Harris: Does the hon. Lady agree that Conservatives on the Committee began the debate by criticising the Government for being too prescriptive and are ending the debate by complaining that they are not sufficiently prescriptive?

Jo Swinson: As my hon. Friend the Member for Bath told the Minister during the debate on the preceding clause, there has been disparity as to who is being prescriptive at various points. We address reputation by raising the profile of the lottery’s good awards and good work. Indeed, hon. Members will have received the briefing from the National Council for Voluntary Organisations on this matter. It states:
“We accept that there have been a number of high-profile controversies about some of the projects that the Lottery has funded — whether that is groups supporting asylum seekers or prostitutes — but this, in our view, serves to strengthen the case for improving public awareness of the true destination of Lottery funding.”
I suggest that that represents a good way forward. I stress the potential negative impact of adding the proposed new clause to the Bill. Reputation can be a subjective concept; one person’s view of what improves the lottery’s reputation may be quite different from another’s. It would be a dull world if we all shared precisely the same views about which projects were most valuable. That is why I hope that the television programme that will allow the public to vote on the people’s millions is going to be a success. The public will differ on which projects should be funded according to their views. Therefore, we should be careful not to impose the restriction that everything must be decided solely on the basis of reputation. That is subjective and might lead to risks not being taken. Sometimes, risks have to be taken with projects; that is nature of some arts and culture lottery distributors.

Hugo Swire: The hon. Lady is, of course, right. However, if she re-examines the clause, she will see that it seeks only to give powers to bodies to require them to have regard to maintaining the reputation of the national lottery and the distributing bodies. That does not mean that they cannot make awards to avant-garde art projects, which are subsequently criticised in the press. That will happen from time to time. The hon. Lady would agree that the bodies should be given the power to avoid that problem.

Jo Swinson: I hear what the hon. Gentleman says, but some funded projects are indeed criticised. I have often listened to Conservative Members criticising lottery awards on the radio; that could be said to be damaging the reputation of the lottery. That interpretation could have a negative impact on whether bodies feel that they are able to take risks in supporting projects that may not be a success, but which we would not wish to debar them from being able to support. I understand the sentiments behind the proposed new clause, and we all agree that the reputation of the lottery should be preserved, but I suspect that there might be another way forward on this matter.

Richard Caborn: It would not be a bad idea to have the reputation of the national lottery written into every hon. Member’s terms of reference. That might curtail some of the more extreme and sometimes misleading statements that have been made about the lottery. The hon. Member for East Dunbartonshire made a very good case as to why we should not support proposed new clause 2. I wish to be clear about inappropriate grants; the distributors can simply decide not to make a grant, and that is wholly for them to decide. They have the powers to do that, and that is not affected in any way, nor would it be affected by the proposed new clause.
The purpose of proposed new clause 2 is to require lottery distributors to have regard to their own reputation and that of the national lottery when making grants. None of us wishes to see the reputation of the national lottery or distributors adversely affected. We all agree that it is important that the national lottery’s reputation be maintained. Lottery distributors will want to ensure that their reputations are maintained, too.
It is because we want to maintain the national lottery’s reputation that we are making considerable efforts, not least through provisions in the Bill, to enable the public to know more about what lottery good causes are achieving. The hon. Member for East Dunbartonshire (Jo Swinson) indicated that, through people’s millions, we shall engage people in ways in which we have probably not done before. We hope that that will give the lottery credibility.
The proposed new clause is an attempt to prevent lottery distributors giving grants that the media might deem controversial. What could be considered controversial?I suspect that the hon. Member for East Devon is thinking of a grant that the former Community Fund made a few years ago, to which the hon. Lady also referred. It is important to remember  that, since 1995, only around 1.6 per cent. of the money that has been awarded to the Big Lottery Fund and its predecessors—the Community Fund and the New Opportunities Fund—has gone to projects to help asylum seekers and/or refugees.
Ambulance services, mountain rescue groups, and rescue groups for missing and injured people have been awarded £1.8 million of lottery money. The Big Lottery Fund has given grants of £4.1 million to the Samaritans in the UK. The hon. Lady gave figures for the amount of money that has gone to disabled people that were a factor of 10 greater than that that has gone to asylum seekers. If one had believed the perceptions of the press from stories that they had printed, lottery distributors would not have given that type of indication and definition. The media totally distorted the figures.

Charles Walker: Does the Minister have any words of encouragement for the Bowland Pennine mountain rescue team in Lancashire, which was denied £200,000 funding because its client group was not deemed to be diverse enough? I am not sure what that means, but I have an idea.

Richard Caborn: As the hon. Gentleman knows, I do not get involved with the distribution of funds in individual cases. However, if the hon. Gentleman wishes to write to me, I shall draw the matter to the attention of the appropriate body.

Charles Walker: Does the Minister not agree that statements from the national lottery, such as “Your client group is not diverse enough”, could also damage its reputation? It is not only the awards that it gives that may damage its reputation but the awards that it does not give, and the reasons that are given for not making those awards.

Richard Caborn: A note has been passed to me that is interesting. I hope that the Bill will ensure that people can apply to the right fund to deal with their case. The Bowland Pennine mountain rescue team’s application for lottery funding in 2002 was unsuccessful because mountain rescue did not meet the criteria of the particular funding programme to which it applied; the Community Fund’s large grants.
That programme’s aim was to address deep-seated, long-term problems that caused poverty, joblessness and low quality of life. I hope that what we discussed in earlier sittings will rectify the problems that groups such as the Bowland Pennine mountain rescue team have experienced by being directed to apply to a fund that dealt with poverty, joblessness and low quality of life. The Bowland Pennine mountain rescue team will now be directed to the appropriate part of the lottery fund.
That illustrates the frustration that the hon. Gentleman and I feel when applicants approach us after they have been refused funding because they have not gone to the right part of the lottery to have their application considered.

Charles Walker: Perhaps the mistake came about because someone who is lying on a mountain with a broken leg does have a low quality of life. That might be where the mistake was made.

Richard Caborn: That is one explanation. I could tell the hon. Gentleman that I once did a bit of climbing and mountaineering. I have some good stories, but I shall not be drawn on them.
Some media interests that support other good causes might find grants made to ambulance services, rescue groups and the Samaritans, as well as other community and charity projects, to be controversial. They might consider them to affect the lottery’s reputation. It will be impossible to decide, and that is why the people appointed to the distributing bodies have been given sufficient direction from Parliament to ensure that they maintain the lottery’s integrity.
The hon. Member for East Dunbartonshire indicated that we live in a pluralist society, and the range and nature of projects funded by the lottery should reflect the condition of our society. We need to respond to people’s priorities, but we do not want to sink to the bottom and go to the lowest common denominator. We always need to drive for the highest common factor. The lottery must be inclusive while keeping the confidence of lottery players elsewhere. We do not believe that the proposed new clause would achieve that; it would merely create legal uncertainty and prevent good projects being funded. For that reason, I ask that the proposed new clause be withdrawn.

Hugo Swire: The Minister—in his words, not mine—said that distributors can simply decide not to make a grant. Of course they can decide not to make the grants, but they must give reasons for not doing so. The problem is that because of the politically correct world that we now inhabit, at times they have found themselves having to make those grants rather than fighting their case, because they have no reputation or impact clause on which to fall back. The Minister has not quite grasped the point.
The Minister was quick to say what the Government were doing to get more publicity for the lottery so that more people are aware of what the lottery does. I suppose that that is manifestly a good thing. However, it still does not address the problem of giving distributors the ability to fall back on a reputational impact clause. I know that some of them would like to have such a clause, and it would have avoided some of the grants that have undermined the lottery.
We live in a plural society, and there is no absolute failsafe method of preventing adverse comments made by the press about grants that a particular paper with a particular agenda might consider inappropriate. That will always happen. However, that does not mean that we should not try to stop that by including the provisions of the proposed new clause in the Bill. If that was our argument for legislation, we would not have much legislation on anything.
I was disappointed in the hon. Member for East Dunbartonshire who spoke on behalf of the Liberal Democrats, because I hold her in high regard. She made a motherhood and apple pie Liberal Democrat speech, saying “on the one hand” and “on the other hand”. Although the hon. Lady did not agree with me, she did not say what she thought could replace the provisions. This may be one of those occasions when we end the Committee divided, with the Opposition seeking to vote against the Government but without the support of the Liberal Democrats, who have been such supporters of ours during most of the Committee’s deliberations.
I am not satisfied that the proposed new clause should not be included in the Bill; in fact, I am convinced that it should be included. The hon. Member for Glasgow, South is also keen for it to be included in the Bill; his criticism seems to be that we are being contradictory by prescribing. It is not really a prescription: a reputational impact clause is empowering the distributors to take decisions based on their own judgment rather than being forced to do so for reasons of political correctness or other agendas. It is therefore with some delight and anticipation, Mr. Gale, that I seek to attract your eye in order to press this final amendment to a vote.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes 3, Noes 11.

NOES

Question accordingly negatived.

Bill, as amended, to be reported.

Committee rose at fifteen minutes past Two o’clock.